Markets & Finance

Asia Higher, Europe Mixed

March 06, 2005

European stock markets were mixed on Monday. In London, the Financial Times Stock Exchange-100 lost 9.10 points, or 0.18%, to close at 5027.20. The FTSE ended lower as a slightly higher start on Wall Street was unable to offset weakness at BAE Systems, GlaxoSmithKline and the London Stock Exchange. The race to win the London Stock Exchange took a dramatic turn after Deutsche Boerse withdrew its preliminary offer overnight. GlaxoSmithKline fell after Morgan Stanley highlighted manufacturing problems revealed on Friday in its Paxil and Avandamet drugs are potentially quite serious and may become a long-term problem. British Airways chief Rod Eddington is to leave the airline several months earlier than expected, The Sunday Times reported. Among broker changes, ITV was lifted by a bullish note from CSFB and Vedanta gained after an upgrade from Deutsche Bank.

In Germany, the Dax gained 4.57 points, or 0.10%, to close at 4428.09. Frankfurt closed higher in a session of light trading. Wall Street remained upbeat continuing Friday's rally after jobs data eased concerns about the pace of interest rate increases. The main local news today was the decision by Deutsche Boerse's Chief executive Werner Seifert to withdraw its bid for the London Stock Exchange, which now leaves his and Chairman Rolf Breuer positions as virtually untenable. The shares initially rallied on the news but fell away as investors took profits following its recent rally. Elsewhere, TUI gained after UBS upgraded the stock to buy and lifted the target to 25 euro. Infineon fell after it was downgraded by CSFB and JP Morgan on DRAM price concerns. Siemens won a 330 million euro contract in the UAE to build a power plant. Deutsche Telekom could lose market share in fixed-line business as Vodafone's Arcor plans flat rate fees from April. BMW's unit sales are only to grow by 6% to 9% in 2005, vs. 9.4% in 2004.

France's CAC-40 gained 16.42 points, or 0.40%, to close at 4108.00. The CAC40 ended the session just above the the 4,100 mark. In the U.S., the Dow's attempted advance was capped by Boeing's near 2% slide, after group president and CEO Harry Stonecipher was fired. The tech-laced Nasdaq Composite meanwhile, took more confident strides after Qualcomm raised its profit outlook. At home, Sanofi, Air Liquide, Vivendi, France Telecom and Suez paced the CAC40. Air Liquide was the strongest blue chip percentage gainer, lifted by a DrKW upgrade to add. Vivendi Universal was buoyed after majority-owned Maroc Telecom reported solid double-digit fiscal 2004 sales and operating profit growth, and proposed a DPS of 5 dirhams. Sanofi turned positive after the US FDA accepted NDA for its Exubera (inhaled human insulin powder) which it produces with Pfizer. In the broader market, Deutsche Boerse's decision to pull out of the bidding for LSE has left the door open to Euronext to buy the London exchange, and for a lower price. Other key broker changes: Alcatel jumped after JP Morgan upgraded to overweight from neutral.

Asian markets were higher on Monday. In Japan, the Nikkei 225 gained 52.31 points, or 0.44%, to close at 11,925.36, its highest close in 10 months. Sony rose after announcing that British-born head of U.S. operations, Howard Stringer, would be the company's new chairman and chief executive, replacing Nobuyuki Idei. This was interpreted by the markets to be a positive step for the company. Sony, the second most actively traded stock by value, gained 1.5 percent to 4,070 yen. Sony shares were actively traded ending the day with a 1.5% gain. Banks were also strong after Friday's signs of strength in the U.S. economy helped bolster bullish sentiment about future growth for world economies. Basic materials, shipping, and oil stocks rose.

In Hong Kong, the Hang Seng gained 41.17 points, or 0.30%, to close at 13,771.95.

Canada's benchmark TSX/S&P loses 41.11 points, or 0.41%, to close at 9,886.09.